The sharp sell-off in USD/JPY tells us FX traders were disappointed by this morning's non-farm payrolls report and they won't be the only ones because today's jobs number spells big trouble for the Federal Reserve and for President Obama. The magic number today was 100k and unfortunately American companies added only 80k jobs in June. After the small upward revision to the May report, non-farm payrolls were virtually unchanged. Federal Reserve officials hoped that today's jobs number would allow them to coast on the monetary easing of other central banks and spare them from QE3. Unfortunately this won't be the case. Even though job growth accelerated, the sluggish pace of improvement in the labor market means that the Fed will need to keep up with the ECB and BoE in August. In other words, get ready for a third round of Quantitative Easing because it is hard to argue that